President Trump and Secretary Mnuchin Continue Toward “Main Street” Parallel Banking System…

On Tuesday of this week the Senate voted, narrowly, to strike down a CFPB banking rule that was set to begin in 2019.  The CFPB (Consumer Financial Protection Bureau), is the watchdog financial agency created by Congress in the aftermath of the mortgage mess.

The CFPB rule, five years in the making, would have allowed individual and class action lawsuits against financial institutions by consumers and lawyers instead of arbitration to settle disputes.  The Democrats and those who supported the rule framed the arguments around protecting consumers from predatory banks. However, those against the rule pointed out the cost to smaller banks, community banks and credit unions.

Big banks and multinational financial enterprises (ie. The Big Club) can afford massive groups of lawyers to defend their interests; smaller community banks and credit unions cannot afford such litigious costs.  The K-Street lobbyists were against the regulatory rule as a natural outcome of their general disposition toward regulation.  However, K-Street was specifically ambivalent to the final senate vote because increased systemic regulation supports their competitive ability to dominate the U.S. financial system.

Richard Condray is the head of the Consumer Financial Protection Bureau and was appointed in 2012 to a five year term by President Obama.  Condray is anticipated to step down soon and run for Ohio governor.  President Trump will appoint his replacement and will likely appoint someone who is focused on protecting consumers but also understands the important need to expand capital investment into Main Street USA.

President Trump’s political opposition will frame any appointee as a person likely to remove regulation; thus will continue their political argument that POTUS Trump is removing all of the regulatory “progress” installed by President Obama. However, those who have followed the goals and objectives of President Trump and Secretary Mnuchin will note the administration regulatory goals are inherently different from all prior approaches.

Trump and Mnuchin view the entire U.S. banking system as too monolithic and generally positioned to the benefit of Wall Street and not Main Street.  As such their approach toward regulation is to split the regulatory financial system into two segments according to the size of the bank (or financial entity).   Big institutional banks (more than $10 billion) will retain comprehensive regulation over their practices; however, smaller banks will not have the same level of regulatory and compliance mandates. This approach is the modern era financial outlook that, like MAGAnomics, is entirely new and bold.

“we do not support a separation of banks from investment banks, we think that would have a very significant problem on the financial markets, on the economy, on liquidity; and we think that there is proper things that potentially we could look at around regulation, but we do not support a separation of banks and investment banks.”

~ Treasury Secretary Steven Mnuchin testifying to the Senate Banking Committee, May 18th 2017

At first blush that statement from Secretary Mnuchin might seem to run counter to the Trump administration’s prior policy statements outlining a preference for a reinstatement of some form of “Glass-Steagall” regulatory separation between commercial banking and investment banking.  However, it doesn’t.

When combined with the totality of Mnuchin’s testimony before the Senate Finance Committee, Mnuchin is saying the current “too big to fail” (‘too big to succeed’) issue has created a problem for lending liquidity.  Specifically, if divisional separation is required – the banks’ best interests would naturally put the investment division ahead of commercial lending and the liquid capital within the overall U.S. economy would shrink.

After watching hours of interviews and presentations, and after looking at the policy briefs from within the Mnuchin led Treasury, CTH has a pretty good handle on what the administration is doing based on the executive orders signed earlier in the year….

Back in July 2010 when Dodd-Frank banking regulation was passed into law, there were approximately 12 to 17 banks who fell under the definition of “too big to fail”.

Meaning 12 to 17 financial institutions could individually negatively impact the economy, and were going to force another TARP-type bailout if they failed in the future.  Dodd-Frank regulations were supposed to ensure financial security, and the elimination of risk via taxpayer bailouts, by placing mandatory minimums on how much secure capital was required to be held in order to operate “a bank”.

One large downside to Dodd-Frank was that in order to hold the required capital, all banks decreased lending to shore-up their liquid holdings and meet the regulatory minimums.

Without the ability to borrow funds, small businesses have a hard time raising money to modernize or create new business.  In the big picture growth in the larger economy is hampered by the absence of capital.

Another downstream effect of banks needing to increase their liquid holdings was exponentially worse.  Less liquid large banks needed to purchase and absorb the financial assets of more liquid large banks in order to meet the regulatory requirements.  Indeed this is exactly what happened.

In 2010 there were approximately twelve “too big to fail banks”, and that was seen as a risk within the economy, and more broad-based banking competition was needed to be more secure.

Unfortunately, because of Dodd-Frank, by 2016 those twelve banks had merged into only four even bigger banks that were now even bigger risks; albeit supposedly more financially secure in their liquid holdings.   This ‘less banks’ reality was opposite of the desired effect.

The four to six big banks (JP Morgan-Chase, Bank of America, Citigroup, Wells Fargo, US BanCorp and Mellon) now control $9+ trillion (that’s “TRILLION).  Their size is so enormous that small number of banks now control most of the U.S. financial market.

Because they control so much of the financial market, instituting a Glass-Steagall firewall between commercial and investment divisions (in addition to the Dodd-Frank liquid holding requirements), would mean the capability of small and mid-size businesses to get the loans needed to expand or even keep their operations running would stop.

2010’s “Too few, too big to fail” became 2016’s “EVEN FEWER, EVEN BIGGER to fail”.

That’s the underlying problem for a Glass-Steagall type of regulation now.  The Democrats created Dodd-Frank which:

•#1 generated constraints on the economy (less lending),

•#2 made fewer banking options available (banks merged),

•#3 made top banks even bigger.

This problem is why President Trump and Secretary Mnuchin are working to create a parallel banking system of smaller community and credit union banks that are external to Dodd Frank regulations and can act as the primary commercial banks for small to mid-sized businesses.

This intended banking design of smaller, more connected to Main Street lending, is why President Trump and Secretary Mnuchin did not support the CFPB banking rule that allowed lawsuits against all financial entities.

The goal of “Glass Steagall”, ie. Commercial division -vs- Investment division, is actually being achieved by generating an entirely new system of banks under different regulation.  The currently remaining ten U.S. “big banks” operate as “investment division banks” per se’, and are subject to larger regulatory requirements.  However, the lesser regulated community banks/credit unions operate as the “Commercial Side” benefiting Main Street.

Instead of fire-walling an individual bank internally within its organization, the Trump/Mnuchin plan looks to be fire-walling the banking ‘system’ within the U.S. internally.  Hope that makes sense.

 

 

 

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59 Responses to President Trump and Secretary Mnuchin Continue Toward “Main Street” Parallel Banking System…

  1. MMinLamesa says:

    The arbitration that is now going to be allowed is the ONLY way for anyone or group to challenge anything by one of these huge banks. IOW no more lawsuits, class action or individual.

    Well this arbitration is carried out entirely behind closed doors with the bankers picking from a pool of professional arbiters. In the past it has been proven that the same ones, with past favorable judgments for the banks, were repeatedly choose. This arbitration has found for banks in over 90% of cases.

    Further this arbitration can not be challenged, there are no written records made of the proceedings and no past judgments need to be used for deciding. Again, IOW, the arbiters can make “gut” calls.

    Looks very shady to me.

    Liked by 5 people

    • Howie says:

      I do not care if we import nothing at all myself. I would rather the USA be self sufficient in all things. Regardless of prices. it would all work out in the end.

      Liked by 6 people

    • pageoturner says:

      Would you feel better to know that Elizabeth Warren’s Harvard professorship was paid for by a Wall Street law firm who makes its money suing banks and financial companies on a class action basis for violating regulations it pays Warren and other politicians to enact, keeps millions for itself in awards and gives the aggrieved class action plaintiffs coupons for something worth $1.50?

      Liked by 4 people

      • TreeClimber says:

        I can definitely see both sides of the issue here… personally I’m in favor of “arbitration first” and if there’s disagreement, then it can move on to a lawsuit… when I was hired, I signed a contract saying I couldn’t sue the company, only go through arbitration. I’ve been somewhat scared of abuse ever since, and really only work there because I like and trust the store managers (for the most part.)

        Liked by 1 person

    • carrierh says:

      Then arbitrator must be agreed to by both parties as is more usual. I would think that would be part of the outcome.

      Like

  2. DODD FRANK created that mess.
    that needs DESTROYED AND BANNED.

    Liked by 4 people

  3. Sayit2016 says:

    There has been a disturbing issue I have been following.. not sure if any of you have heard about this but it dovetails in to the Tax Bill/Parralle Banking the President is working on and there is a reason he wants it done this year.

    There is a new technology and banking system that is set up and called the Distributed Ledger System set up by IMF. There are internal documents that PROVE global elites are preparing to use this new financial system.

    The IMF has even set up a special task force and they’ve been meeting behind closed doors to discuss the details.

    Barbara C., a former US Treasury Department attaché to the European Union, was able to infiltrate one of those internal IMF discussions… And she was stunned with what she heard. She said:

    “If the world seeks to diversify away from the US dollar, then [Distributed Ledgers] could initiate for the IMF an entirely different type of construction project.”

    Another member of the global elite, Carl T., confirmed that “there’s much anticipation surrounding Distributed Ledger technology.”

    Now that Trump is in power, they’re ready to pull the trigger…..

    Globalists are setting Trump up and will try to blame him for the chaos. It’s no secret the global elites hate President Trump. His nationalistic agenda is the exact opposite of the globalists’ hidden agenda of world government, world money and world taxation.

    Trump believes in “America first,” not globalism…He believes in immigration control, not open borders. He said himself…“There is no such thing as a global anthem, a global currency or a global flag. This is the United States of America that I’m representing.”

    That’s why he already pulled our nation out of the globalists’ international trade deal known as TPP… And defied global elites by pulling out of their Paris climate accord.

    Trump is a major threat to the global elites’ agenda. And now they have the perfect plan to stop him. Sundance has told us time and time again TRILLIONS ARE AT STAKE.

    In fact, the “fake news” mainstream media already started to lay the groundwork for blaming Trump. The U.K. Independent newspaper published an article saying:

    “The great dollar crisis… will follow the banking crisis and the Great Recession — and it will all be sparked by The Donald.”

    Even The Wall Street Journal is playing the blame game. They wrote: “Could the new president bring forward the day the dollar loses its reserve-currency The global elites are the real threat to America… NOT Trump policies.

    As you’re about to see, the global elites have been working on this plan to dethrone the dollar for years. It just so happens now they have the perfect scapegoat to execute their plan.

    It’s their chance to END America’s “Exorbitant Privilege”

    But they’ve been proven wrong again, again and again. Have you noticed that our debt has been exploding for years… And yet, nothing has happened to the US dollar?

    The reason is simple… The US dollar remains the world’s reserve currency.

    That means other nations have to hold and use the US dollar for international trade, instead of their own currencies. This creates a virtually unlimited demand for US dollars… And it allows us to print trillions of dollars each year to pay for wars, debt and anything we want.

    Basically, it’s a license to print money and abuse the global system. And that’s why we’ve been able to accumulate more than $19 trillion in debt without suffering any consequences.

    As long as there’s no alternative to the US dollar, we can keep doing that forever. Look, our nation had an amazing run with the US dollar as the #1 reserve currency.

    Because of it, we have the world’s best technology… The word’s most influential culture… The world’s most powerful military…

    We were able to build a true empire with seemingly unlimited control of the world. But that’s precisely why global elites are sick of the US dollar. How do you think the other 190+ nations feel about the fact we can print a $100 bill anytime we want…

    While they actually have to pony up $100 of actual goods in order to obtain the same bill?
    Global elites are sick of what has been called America’s “exorbitant privilege.” And now they’re finally taking action to “fix” this problem.

    For years, they’ve been working on a plan to replace the US dollar with their own globalist currency. What’s different this time is… they finally have the tool they need to execute their plan.

    But the United Nations and the IMF have both CONFIRMED this plan to replace the US dollar is real.

    The UN said we need “a new global reserve system… that no longer relies on the United States dollar as the single major reserve currency.”

    And the IMF admitted they want to make “the special drawing right (SDR) the principal reserve asset in the [International Monetary System].” More recently, they advanced their plan by helping private institutions, such as the UK’s Standard Chartered Bank, issue bonds in SDRs.

    Although our mainstream media ignored this major event, the UK media reported:

    Distributed Ledgers go live on January 1st, 2018…

    This trend will accelerate… And many other nations will be able to dump the US dollar for SDRs. Look, you don’t need to be an economist to connect the dots here.

    But let me sum it all up for you…

    Fact #1 — The IMF issues a globalist currency called SDRs.

    Fact #2 — The IMF has confirmed they want to replace the US dollar with SDRs.

    Fact #3 — The IMF has confirmed Distributed Ledgers can be used for “currency substitution”… and they’ve even set up a special task force.

    Why do you think they’re so interested in Distributed Ledgers? The IMF wouldn’t be looking at this technology to create a dollar payment system. They’d be looking at it to create an SDR payment system, because that’s the currency they issue.

    If tax reform happens the dollar and markets will be saved and surge.

    Is anyone else following this ?

    Liked by 5 people

    • Howie says:

      Sure. They want a cashless subsidy based financial system where the price of goods and services is based on income. Known it for years.

      Liked by 5 people

    • Howie says:

      You can buy anything you want. But there isn’t any to buy. Until the next ‘shipment’.

      Liked by 3 people

    • ok4ayl says:

      They can certainly try, but the United States is the lone Super Power for a host reasons, we aren’t going anywhere, LEDGER or no LEDGER….:)

      Liked by 3 people

    • TheLastDemocrat says:

      A $100 bill, U.S., in paper or on a ledger, has value because it is in units of our productivity.

      It does not have value in and of itself.

      If we print and distribute more $100 bills, we do not add $100 wealth. If we make a widget for $2 and sell it for $102, we have created $100 wealth.

      If we double the money in circulation today, and someone finds out, they gauge the value of each $100 to be half of what it was yesterday.

      IOW: the value of each dollar is established in our productivity. If someone wants to replace our dollar as a reserve currency, they need productivity to back their currency. By whatever term you want to call a unit of that bill, or currency. No matter what you contrive, it will have to be a recognized unit of exchange, with a numeric value assigned to it. And that value per unit will have to, in one way or another, be differentially valued as individuals judge its worth to rise or fall, based on what it represents – the productivity that backs it up.

      These goofballs might try to usurp the dollar, but I expect their best plan will be a planned economy, where they can control productivity. Maximally, they can do that best, in the short term, with slavery, or something close to it (like “guaranteed employment at a livable wage”).

      They will then figure out they cannot produce wealth per unit of currency with a top-down, planned economy and mandated slave labor. Once you guarantee my wage, regardless of whether I put out effort or not, my productivity will drop as low as I can get away with. And, I will be absent from work a lot – and will be carrying out yet another money-making scheme with my free time, and built-in capital.

      Liked by 7 people

    • G. Combs says:

      Yes, To some extent. However the fly in the ointment is BRICS.

      China and Russia have wanted to get away from the US Dollar for years. BRICS and esp Russia and China have figured out the bankers and are challenging them.

      They are buying up gold and mining gold and have challenged the World Bank/IMF/US Petrodollar system just like Gadhafi did. The Elite can not allow such a challenge or the whole fiat currency mess falls down around their ears.

      Details on gold buying and BRICS development bank HERE

      This is WHY Soros and his buddies want a war with Russia. They completely screwed themselves by weakening the USA and building up China, India and other countries.

      Both Russia and China tossed Soros and his Open Society agitators out on their ear.

      “Germany, France and Italy followed the U.K.’s lead in applying to join a China-led international development bank, lending the weight of Europe’s largest economies to the project despite U.S. opposition.
      Europe’s four top powers have now broken ranks with Washington in moving to become founding members of the Asian Infrastructure Investment Bank. The decision is expected to spur other U.S. allies to back the potential challenger to the World Bank and the Asian Development Bank, where Washington has significant influence.
      It also comes as Obama administration officials warn that the U.S. is also losing clout through the world’s emergency lender, the International Monetary Fund.
      China launched the AIIB in October—one in a series of moves to boost its regional and global influence—and invited other countries to join as founding members by March 31. Endowed with an initial capitalization of $50 billion, the bank would have a mandate to finance infrastructure projects around the world.”

      (wwwDOT)wsj.com/articles/germany-france-italy-to-join-china-backed-development-bank-1426597078?mod=rss_europe_whats_news

      CIA Insider Leaks Evidence of China Gold “Smuggling”
      http://moneymorning.com/ext/articles/rickards/china-smuggling-gold.php?iris=253975&utm_source=taboola&utm_medium=referral

      “Rickards contends that because of this suspicious activity, the Chinese government now owns 4x more gold than they admit.

      “They lie about this,” he said.

      “They officially say they have 1,054 tons; that’s what the official records show. But in reality they have more than 4,000 tons.”

      This secret stockpile would amount to more than 10% of all government-owned gold in the world, all by itself.”

      China Gold BRICS and World Bank 2014 climate

      The Congo is incredibly blessed with natural mineral wealth – coal, cobalt, copper, diamonds, gold, manganese, offshore petroleum, silver, tin, uranium and zinc. Leopold II, King of Belgian, no fool he, was the de facto owner of the Congo Free State from 1885 to 1908.

      Any surprise that the elite do not want Africa developed by the Africans? Or that China and Russia via the BRICS Development Bank, a rival to the banksters World Bank are making a grab for it?

      The BRICS nations have decided to fund their development bank with $100 billion. The reserves are aimed at financing joint development ventures, and are set to rival the dominance of the World Bank and the IMF…
      http://rt.com/business/russia-brics-bank-g20-468/

      Liked by 2 people

    • G. Combs says:

      More from my research several years ago:

      Things get interesting when you realize the BRICS countries are amassing gold. Both Russia and China have been rattling the cage for several years making it obvious they want to see the end of the US Dollar as the World Reserve Currency. The USD being a fiat currency controlled by bankers.

      Congress has no idea of how much gold is in Fort Knox. The bankers won’t let them count it. Calculations show the USA has no ‘Good Deliverable Gold’ left. The Great American Disaster: How Much Gold Remains In Fort Knox? — (wwwDOT)lewrockwell.com/2010/08/chris-weber/the-great-american-disaster-how-much-gold-remains-in-fortknox/

      Remember this was the gold confiscated from US citizens by FDR to back the Federal Reserve bank script that was then transferred to European banks. While US citizens could not exchange Federal Reserve bank script for gold, foreign banks could and did so with abandon until Nixon closed the gold window in 1971. That was when Nixon took the USD off the gold standard completely and the Federal Reserve started printing US dollars like there was no tomorrow.

      China for several years has encouraged her citizens to BUY GOLD. China Urges Citizens to Buy Gold and Silver

      Next the Chinese government has been buying up gold.
      China Working Quietly To Buy Up Gold — (wwwDOT)forbes.com/sites/greatspeculations/2013/07/22/china-working-quietly-to-buy-up-gold/

      Russia is also buying gold. Putin Turns Black Gold to Bullion as Russia Outbuys World — (wwwDOT)bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bullion-as-russia-out-buys-world.html

      Next is Mining Gold.

      Global Gold Mining Production
      For the map, click the center then hover over a country. For the actual amounts go to the bottom left of the map and click the magnifying glass.

      Three of the BRICS countries have increased gold mining and they are the world’s top producers. The US has gold but the UNITED NATIONS BLOCKED the mine near Yellowstone. Both Australia and Canada have stepped up gold mining while the USA has decreased gold mining.

      Liked by 1 person

    • G. Combs says:

      And a bit more:
      ….

      As an aside here is interesting scuttlebutt about gold and the international stage. Remember Gadhafi’s son was attending the Fabian’s London School of Economics thanks to Gadhafi’s good buddy Tony Blair. Seems Sonny may have learned a few things about gold, fiat currency and economics and passed them on to old Dad.

      Blair also had six private meetings with the dictator in the three years after he left Downing Street. — (wwwDOT)telegraph.co.uk/news/politics/tony-blair/8787074/Tony-Blairs-six-secret-visits-to-Col-Gaddafi.html

      This would have been when Blair was the Middle East envoy for the United Nations. Blair became envoy on the day he resigned as Prime Minister in June of 2007. Tony Blair was also hired in 2008 by JP Morgan.

      It remains unclear exactly why or how the Gadhafi regime went from “a model” and an “important ally” to the next target for regime change in a period of just a few years. But after claims of “genocide” as the justification for NATO intervention were disputed by experts, several other theories have been floated.

      According to more than a few observers, Gadhafi’s plan to quit selling Libyan oil in U.S. dollars — demanding payment instead in gold-backed “dinars” (a single African currency made from gold) — was the real cause. The regime, sitting on massive amounts of gold, estimated at close to 150 tons, was also pushing other African and Middle Eastern governments to follow suit….

      And it literally had the potential to bring down the dollar and the world monetary system by extension, according to analysts. “ —- (wwwDOT)thenewamerican.com/economy/markets/item/4630-gadhafi-s-gold-money-plan-would-have-devastated-dollar

      Gadhafi could not get away with that plan but it looks like the BRICS countries are going to try next. Too bad Clinton gave China US technology, military secrets as well as our jobs while chasing the illusion of Interdependence.

      I think China and Russia are a heck of a lot more interested in world domination than in world interdependence and the UN’s pipe dream of Global Governance. China especially.

      Lessons of history: China’s century of humiliation

      China Picks at the Scab to Keep the Wound Fresh — (wwwDOT)americanthinker.com/articles/2014/04/china_picks_at_the_scab_to_keep_the_wound_fresh.html

      Ghaddaffi stepped on the toes of his ‘Masters’ They sent Ex-prime Minister Tony Blair to warn him to comply OR ELSE. He did not comply so the Banksters took him out. Now the World Bank is putting one of their own in charge of Libya’s wealth.

      What a Surprise!

      Tony Blair ‘visited Libya to lobby for JP Morgan

      Tony Blair used visits to Libya after he left office to lobby for business for the American investment bank JP Morgan, The Daily Telegraph has been told.
      ….Mr Blair began work in January 2008 as a £2million-a-year adviser to JP Morgan. Last month, American officials told the New York Post newspaper that the bank managed more than half a billion US dollars on behalf of the LIA [ Libyan Investment Authority]….

      …The documents show that among the people he was due to meet in 2009 was Mohammed Layas, head of the LIA…. — (wwwDOT)telegraph.co.uk/news/politics/tony-blair/8772418/Tony-Blair-visited-Libya-to-lobby-for-JP-Morgan.html

      Possible reason why Ghaddaffi was targeted.

      Gadhafi’s Gold-money Plan Would Have Devastated Dollar
      “It remains unclear exactly why or how the Gadhafi regime went from “a model” and an “important ally” to the next target for regime change in a period of just a few years. But after claims of “genocide” as the justification for NATO intervention were disputed by experts, several other theories have been floated.

      Oil, of course, has been mentioned frequently — Libya is Africa‘s largest oil producer. But one possible reason in particular for Gadhafi’s fall from grace has gained significant traction among analysts and segments of the non-Western media: central banking and the global monetary system….
      According to more than a few observers, Gadhafi’s plan to quit selling Libyan oil in U.S. dollars — demanding payment instead in gold-backed “dinars” (a single African currency made from gold) — was the real cause. The regime, sitting on massive amounts of gold, estimated at close to 150 tons, was also pushing other African and Middle Eastern governments to follow suit….”
      — (wwwDOT)thenewamerican.com/economy/markets/item/4630-gadhafi-s-gold-money-plan-would-have-devastated-dollar

      And the other shoe drops…
      Libya’s $60bn fund recruits World Bank exec to restore calm
      “… Ahmed Ali Attiga to be appointed by $60bn Libyan Investment Authority as violence-hit country attempts to recover from Gaddafi era

      Libya’s $60bn sovereign wealth fund is close to appointing a senior executive at the World Bank in an attempt to restore the financial credibility of the crisis-hit African state, The Telegraph can reveal.

      Ahmed Ali Attiga is expected to be appointed as head of the Libyan Investment Authority (LIA) by the end of the year, following a nomination process that has been much delayed as the country remains embroiled in violence, in the wake of the civil war that toppled Muammar Gaddafi in 2011.

      Libya’s oil-dependent economy has been crippled by strikes at oilfields and by continued political instability and contracted by 9.4pc last year, according to the World Bank.

      The LIA, set up in the mid-2000s as Libya was brought in from international isolation, is tasked with investing the wealth accumulated during the Gaddafi years, but has been rocked by links to the old regime….” — (wwwDOT)telegraph.co.uk/finance/newsbysector/banksandfinance/11044466/Libyan-Investment-Authority-recruits-World-Bank-exec-to-restore-calm.html

      Liked by 3 people

    • val66 says:

      The US Dollar losing it’s world reserve currency status is my biggest economic nightmare. It would immediately cut the dollar’s worth by at least 20%. Interests rates, and thus our debt, would go way up. We’d be screwed. It would make the Great Depression look small in comparison. I really hope Trump is aware of this plan and is on top of it.

      Liked by 1 person

    • dayallaxeded says:

      Pretty sure the prevalent form of “distributed ledger” system already in use and gaining acceptance in leaps and bounds is “block chain”. This is the system that Bitcoin, Ethereum and other “crypto currencies” are designed for. Just about every major financial player and every international industry is pursuing ways to use this technology to make transactions faster, cheaper, and arguably more secure. It is a very very complex issue, so I’m not going to try to say it’s all bad or all good or what % of each.

      I’d be interested in hearing what those who are always carping about the Federal Reserve think about the development of non-fiat currencies and payment/ledger systems that operate outside of virtually all government regulations. A friend who’s an expert in computer networking and such systems tells me the quasi-legal marijuana industry has been an early adopter. I’d think their paranoia and intense concern about product and money flows would work to produce a pretty solid system. Time will tell.

      In the meantime, if USD ceases to be the dominant currency for foreign exchange, it will devalue somewhat, making US exports much more competitive. As long as the devaluation isn’t too severe and has that kind of genesis, rather than issues of national stability, it may not be a bad thing at all.

      Liked by 3 people

  4. Howie says:

    I want a passbook savings account.

    Liked by 5 people

    • I remember as a child the local savings and loan giving piggy banks to kids to fill up and bring in to open their very first passbook savings acccount. The permanent sign outside proudly advertised a whopping 2% interest. Yep, those were the days.

      Liked by 5 people

  5. angusmcgeef says:

    Dodd Frank enables the preservation of the big bank oligarchy through too big to fail taxpayer backed bail-out “risk insurance” while destroying the competition from the small community banks through prohibitive and debilitating regulations. Get rid of Dodd Frank!

    Liked by 2 people

  6. Blacksmith8 says:

    Why exactly do we have the CFPB and the dodd-Frankenstein still with us today?

    Liked by 1 person

  7. magatrump says:

    Thanks SD. Great explanation as always!

    Liked by 1 person

  8. Evelyn says:

    Does anyone know if Kasich has plans? I don’t follow Ohio politics closely but am curious.

    Liked by 1 person

  9. Howie says:

    In the 50’s I had a passbook account with good interest. Had one in the 90’s with bad interest. Dont have one now, no interest.

    Liked by 6 people

  10. progpoker says:

    Instead of ‘too big to fail’ and ‘too big to succeed’, I think we need a third, MAGA compliant category…

    ‘Too Big To Exist’!

    The thought that 12 – 17 entities can hold the Nations economic health hostage is just wrong!!

    Liked by 3 people

  11. Brant says:

    I doubt there will ever again be a savings interest anywhere near 4%. 2% is probably the absolute max the US budget could handle. 5,6,7%? Never again.

    Like

  12. Brant says:

    I have my account at Wells Fargo because I have dealings in South Georgia, middle Georgia, and NC. I am thinking I am going small local since I’m South Georgia 90+% of the time. And can get cash elsewhere as needed. I’ve always felt bad I use wfc.

    Like

    • You get so much better service with a local credit union.
      And the fees are lower too.

      Liked by 2 people

    • I use Wells Fargo, also. I like that it is national and I can access their atms and my accounts pretty much anywhere I go.

      I also have had very bad experiences with two local banks; one local to the town and one local to the state (NC). The second one would not let me roll over my IRA funds into my 401k fund (Fidelity…and, yes, it was permissible in my fund to do this). I thought I was going to have to hire a lawyer, which I finally threatened to do and that’s when I finally got my money rolled over.

      I have no idea what the issue was, they would not tell me. Afterward, I was going to file a complaint with the state banking commission and this bank was not regulated by it!!! My only option was the FDIC….I let it go because every time I started composing an email or letter, I got so angry I could not go on.

      So, I do not want to deal with a personal banker; I do not want to deal with idiots who work in local banks. I’m sticking with Wells Fargo until they steal my money or fold.

      Liked by 1 person

  13. exiter says:

    Class action lawsuits are just cash windfalls for lawyers.

    Liked by 1 person

  14. Deborah @UnTamedInSD says:

    Thank you Sundance for the great explanation – Banking/finance is not my strong suit so to have a great article that is easy to follow like this one is PRICELESS 🙂

    Liked by 4 people

  15. Janice says:

    If it wasn’t for Sundance and Treepers i would be wandering in the wilderness. I’ve always ‘thought’ something wasn’t quite right in this country but I’m not smart enough to articulate these thoughts into words.sundance and Treepers enlighten and teach beyond anyone i could imagine. Pure honesty without affiliation to any brands or parties. Thank you one and all.

    Liked by 3 people

  16. TreeClimber says:

    Anyone know a good solid (preferably free, as I don’t even have the money for living essentials,) economics course? I love the Sundance School of Economics and Government, but I feel like I’m reading the second-level textbook and skipped the first…

    Liked by 1 person

  17. thesavvyinvester says:

    My 2 cents?

    The parallel ladder for small banks will give them margins the too big to fails could only dream of. They will be the nimble Lotus 7 on the race course whilst the big banks will be the lumbering Beaumont Delta 88 that Ted the Submarine Commander drove. So do the small banks break up “To increase shareholder equity” as they have to keep the board and shareholders happy if they get their clocks cleaned margin wise like I think they will? Time will tell…

    Liked by 1 person

  18. Johnny Bravo says:

    Friends, this is real, unadulterated 100% purewinning, all the other cr@p pushed by the media is white noise and distraction.

    I’d take one pure good news story a day, anytime, so long as I don’t have to read or listen to conflated bullshine served up daily by the so called news busnese!

    I’m a hermit when it comes to opening up my eyes and ears to all the rubbish printed and screened?

    Liked by 1 person

  19. vrm says:

    I believe that a separation of investment banking is needed because

    investment banks get deposits from a) investor accounts (deposit amounts highly volatile due to market fluctuations) b) 401K deposits (huge) c) borrowing (bank borrowing from fed, not margins)

    commercial banking gets money from a) deposits b) receipts c) fed borrowing

    commercial banking has a far more transparent balance sheet and the only factor determining its functional health is the leverage ration which is regulated by the fed, IMO (not by gov). The fed chairman may have a say in that at the table.

    Mixing the two leads to situations where investment banks borrow heavily from the fed to bolster the stock market (which is why we are seeing this continuous unending bubble) and even worse, leads to increasing debt, both thru bailouts and thru borrowings. It is also supporting the obscene amount of “wealth creation” in S.V. where worthless companies are floating IPOs that dwarf cos that have been around for over 100 years and that employ more people and actually offer tangible products & services. A lot of that stock is bought by investment banks (often 80-90% is bought by them to keep the price stablel) which also handle 401K deposits and that is another tragedy- people don’t realize that their hard earned money is being funneled into the foreign bank accounts of FB, GOOG etc CEOs. All this is possible due to lack of transparency and the blurring of line between various types of borrowing and asset management by the banks.

    Liked by 1 person

  20. tony5460 says:

    Do you have any statistics to support your point #2 fewer banking option because of Dodd Frank? I don’t see any major banking merger post 2010. Most of mega M&A took place during the 2007/08 crisis. Instead, I could argue that there are more banking options now than 2010. Just think about all the P2P lenders and online savings options.

    BTW, Chamber of Commerce has been lobbying for this bill. I thought this blog is anti CoC?

    Like

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